The Bailador Technology Investments Ltd (ASX: BTI) share price has shot higher in morning trading. It's up around 17% amid a proposed deal to buy one of its portfolio holdings, Instaclustr.
For people that haven't heard of these two businesses, Bailador is a listed technology investment fund that focuses on tech companies in the expansion stage that are demonstrating fast revenue growth and typically have a relatively high level of recurring revenue.
Instaclustr is described as a leading platform provider of a fully managed open-source database, with workflow applications, delivered as a service.
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Takeover deal for Instaclustr
Bailador said that on 7 April 2022, NetApp Inc (NASDAQ: NTAP), a global cloud-led, data-centric software company, announced that it had signed a definitive agreement to acquire Instaclustr.
As a result of this transaction, Bailador will increase its carrying value in Instaclustr to A$118 million.
The valuation uplift of $54 million is an increase of 38 cents for the net tangible assets (NTA) per share, pre-tax. The Bailador share price has gone up 22 cents at the time of writing.
The sale price is subject to normal final adjustments. Closing proceeds are subject to the payment of transaction costs and to exchange rate movements between signing and closing.
After the transaction is completed, Bailador will realise its full position in Instaclustr in cash with proceeds expected to be received in FY22.
The agreement is subject to some regulatory approvals and certain conditions to closing. Bailador said it would keep the market updated as these conditions are satisfied and provide further information at that time.
Management commentary
David Kirk, the managing partner and co-founder of Bailador, said:
Instaclustr has been a standout performer in the Bailador portfolio since investment, and the sale of the company to NetApp represents a great outcome for both Bailador and Instaclustr shareholders.
Why is NetApp buying Instaclustr?
Netapp explained modern cloud applications rely on a growing set of foundational services including multiple open-source databases, data pipelines, and workflow solutions.
The CEO of NetApp, George Kurian said:
The acquisition of Instaclustr will combine NetApp's established leadership in continuous storage and compute optimisation with Instaclustr's fully-managed database and data pipeline services to give customers a cloud operations platform that provides the best and most optimised foundation for their applications in the public clouds and on-premises.
Bailador share price snapshot
Despite the large rise in the Bailador Technology Investments share price today, it is still down 3% in the 2022 calendar year to date amid a widespread decline of tech shares on the ASX share market and the global share market.
